Millennium Post

Sebi likely to come out with circular to prevent Karvy-like incidents: Tyagi

Mumbai: Sebi chief Ajay Tyagi on Monday said it will soon come out with a circular to prevent incidents like Karvy Broking Services Ltd (KSBL), which had allegedly misused clients's securities, and asserted that whatever action required will be taken.

"We will just wait and see," he said, referring to the dues to be paid by KSBL. As of February 14, Tyagi said the total dues of KSBL stood at Rs 1,189 crore.

"Securities held by banks are Rs 511 crore, and the banks have no funds. The total shortfall in securities is Rs 183 crore, and funds is Rs 495 crore. So, the shortfall is Rs 678 crore," he noted.

In November, the watchdog barred KSBL from taking new brokerage clients after it was found that the brokerage firm had allegedly misused clients' securities to the tune of more than Rs 2,000 crore.

According to Tyagi, NSE is in correspondence with Karvy and have also issued them a notice.

"I have been told that Karvy has informed that they are in the process of selling a stake in one of their companies where term sheet has also been agreed upon.

"They are claiming that they will clear all outstanding amount by end of March. The amount involved in selling that subsidiary is good enough to take care of the fund requirements for clients and banks. We will just wait and see," Tyagi said.

Stressing that whatever action is required would be taken, he said the first thing is that investors' dues have to be returned in a timely manner.

"First priority will be to return the funds and securities of investors. Whatever else needs to be done will be done," he noted.

Tyagi, whose current three-year tenure is ending on March 31, said it has been quite a good experience at the helm.

"Me and my team believed in a consultative approach, we did not have any regulatory capture, we worked in a transparent manner, we did things cautiously," he said.

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